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Date : May 20, 2022

Shanghai allows 4 million out of homes as Covid rules ease

Shanghai allowed 4 million more people out of their homes Wednesday as anti-virus controls that shut down China’s biggest city eased, while the International Monetary Fund cut its forecast for Chinese economic growth and warned the global flow of industrial goods might be disrupted.

A total of almost 12 million people in the city of 25 million are allowed to go outdoors following the first round of easing last week, health official Wu Ganyu said at a news conference. Wu said the virus was “under effective control” for the first time in some parts of the city.

Under the latest changes, more than 4 million people are included in areas where the status shifted from closed to controlled, Wu said. He said some are not allowed to leave their neighborhoods and large gatherings are prohibited.

Meanwhile, the IMF reduced its forecast for Chinese growth this year to 4.4 percent from 4.8 percent due to the shutdowns in Shanghai and other industrial centers. That is down by almost half from last year’s 8.1 percent growth and below the ruling Communist Party’s target of 5.5 percent.

China’s case numbers in its latest infection surge are relatively low, but the ruling party is enforcing a “zero-Covid” strategy that has shut down major cities to isolate every case.

On Wednesday, the government reported 19,927 new cases in China’s mainland, all but 2,761 of which had no symptoms. Shanghai accounted for 95 percent of the total, or 18,902 cases, of which 2,495 had symptoms.

Volunteers assist residents during neighborhood Covid tests in the Pudong district of Shanghai on Tuesday.

The Shanghai city health agency reported seven people who had Covid-19 died Tuesday but said the deaths were due to cancer, heart disease and other ailments. All but two were over 60.

Shanghai shut down businesses and confined most of its population to their homes starting March 28 after a spike in infections. That led to complaints about lack of access to supplies of food and medicine. People in Shanghai who test positive but have no symptoms have been ordered into quarantine centers set up in exhibition halls and other public buildings.

Official data this week showed economic growth in the first three months of this year declined compared with the final quarter of 2021.

The lockdowns in China “will likely compound supply disruptions elsewhere” and might add to pressure for inflation to rise, the IMF said in a report.

The ruling party has promised tax refunds and other aid to businesses but is avoiding large-scale stimulus spending. Economists say that strategy will take longer to show results and Beijing might need to spend more or cut interest rates.

Chinese leaders have promised to try to reduce the human and economic cost of anti-disease controls by shifting to a “dynamic clearing” strategy that isolates neighborhoods and other smaller areas instead of whole cities. However, many areas appear to be enforcing more stringent controls after Shanghai officials were criticized for not acting aggressively enough.